Customs - Warehoused Goods -No Interest Prior to Extension of Warehousing Period
THE interest payable with respect to warehoused goods was to be calculated with reference to the duty payable at the time of clearance of the goods from the warehouse. This was clarified through CBEC Circular no dated 07.06.1996.
Board had vide Circular dated 29th July 2002, prescribed that interest due in terms of section 61 should be collected before allowing extensions, with a view to encourage early clearances. This led to importers having to deposit interest and seek refunds in the event of interest not being payable, for example incases where goods were finally exported.
Simplification of processes and promoting the ease of doing business :
In order to secure revenue and discourage protracted duty deferment arising due to warehousing, the Board has prescribed conditions for furnishing of security by importers vide circular dated 31.05.2016. The circular also specifies the amount (which is a percentage of the sum of duty and interest) of bank guarantee that would have to be furnished before allowing an extension in warehousing period.
In view of having prescribed the requirement of furnishing a bank guarantee as security,it has been decided by the Board that henceforth there would be no requirement of payment of interest prior to allowing extensions of warehousing period nor would there be any need to issue a demand for payment of interest. Interest, if any, shall be paid at the time of ex-bonding of the goods from the warehouse.
CBEC Circular No. 23/2016-Customs., Dated: June 01, 2016